The explanation behind the sub-prime mortgage crisis

The government is blaming the banking industry, but it is really government pressure that is responsible for the problems in the industry. It is always amazing to me how government regulation begets more government regulation. Stan Liebowitz has an excellent piece on all this in last week's NY Post:

Most people instinctively understand that such loans are likely to be unsound. But how did the heavily-regulated banking industry end up able to engage in such foolishness?From the current hand-wringing, you'd think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards - at the behest of community groups and "progressive" political forces.In the 1980s, groups such as the activists at ACORN began pushing charges of "redlining" - claims that banks discriminated against minorities in mortgage lending. In 1989, sympathetic members of Congress got the Home Mortgage Disclosure Act amended to force banks to collect racial data on mortgage applicants; this allowed various studies to be ginned up that seemed to validate the original accusation.In fact, minority mortgage applications were rejected more frequently than other applications - but the overwhelming reason wasn't racial discrimination, but simply that minorities tend to have weaker finances.Yet a "landmark" 1992 study from the Boston Fed concluded that mortgage-lending discrimination was systemic

306 to 18: Congressional Support for an Individual's Right to Own a Gun is Overwhelming

You can read the brief that Cheney and 305 members of Congress signed here. To say that this is an "unusual step" for Cheney is a bit of an understatement because the brief that he signed put him at odds with the DOJ brief submitted a few weeks ago. The DOJ brief stated that the right to own guns is an individual right, but that the level of burden necessary for the government to restrict that right was relatively low, much lower than for the rest of the Bill of Rights. But the brief signed by Cheney argued for a much higher burden on the government (see the "strict judicial scrutiny" discussion on p. 36). For a news article see this:

WASHINGTON — Vice President Cheney took the unusual step Friday of joining with lawmakers in signing a Supreme Court brief that goes further in support of gun rights than the one submitted by the Bush administration. . . .

Cheney joined more than 300 senators and representatives, led by Sen. Kay Bailey Hutchison, R-Texas, who want the court to rule that Washington's ban is unconstitutional.

2/08/2008

Debate in Washington State over Whether to Create or eliminate Gun-Free Zones

Sonya Jones sent me this link and all I can say is that Senator Murray should be thankful that Sonya isn't working on the Senate Committee on Higher Education.

The bill offered by Sen. Ed Murray, D-Seattle, would ban weapons at colleges that host high school students. That would include community colleges that offer the Running Start program, and universities when high school students are touring.

In response to Murray's bill, Sen. Pam Roach, R-Auburn, introduced her own measure that would prohibit universities from banning concealed weapons. Her argument is that people with permits to carry weapons would make campuses safer. Most universities now ban weapons on campus, but that is not a state law. . . .

But Roach declared, "Based on the policy of the last 30 years, it may be evident that this is a failed policy, there have been 38 college and school shootings since the prohibition of guns in schools was enacted. There were only two recorded during the 150 years preceding that prohibition." . . .

"I want to make sure the record reflects that Virginia Tech was a gun free zone, and results (were) painfully predictable," said Brian Judy, testifying for the National Rifle Association. "Only the victims were gun free."

But gun foes said guns on campuses would create more trouble.

"Well-intentioned people who have firearms and want to save the day often end up adding to the violence of the situation or becoming victims themselves," said Kristen Comer, executive director of Washington Cease Fire. "Any time we start to get into the area of vigilante justice, it's a bit precarious."

I think that I have an easy response to Kristen Comer's concern below about what might go wrong with allowing concealed handguns onto campuses: its called experience. Why do we have to debate about what might happen when we have a lot of experience about what actually happens in these circumstances?

Citizens banned from Carrying Concealed handguns where City Council Attack occurred

A total of seven people were shot, including the mayor and several city officials, before police shot and killed the gunman. The mayor is in critical condition. . . .

Citizens are banned from having concealed handguns at these public meetings. The only exception are members of the city council and a reporter might have inside information on whether any of them have concealed handgun permits.

BATON ROUGE, La. (AP) - A young woman killed two female students in a college classroom at a vocational college Friday, then killed herself, police said.The students apparently were shot in their seats in the second-floor classroom at Louisiana Technical College, Sgt. Don Kelly said.Officers ran into the building within four minutes of the first 911 call, which came at 8:36 a.m., he said."There was mass pandemonium, people running," Kelly said. "One officer - the first into the classroom - told me he could still smell gunpowder."The students' names and ages were not immediately released, and it was not clear whether the shooter also was a student.The school offers classes in a dozen subjects including early childhood education, practical nursing, drafting and welding.

In this case, even though the police officer got to the classroom very quickly it was still not fast enough.

There is some cost for governments nationalizing the assets of foreign firms

There is some cost to Venezuelan President Hugo Chavez taking the assets of firms:

NEW YORK (Reuters) - Exxon Mobil Corp has moved to freeze up to $12 billion in Venezuelan assets around the world as the U.S. company fights for payment in return for the state's takeover of a huge oil project last year.

The company said it has received court orders in Britain, the Netherlands and the Netherlands Antilles each freezing up to $12 billion in assets of Venezuela state oil firm PDVSA. An Exxon spokeswoman said the total that could be frozen worldwide was $12 billion.

Exxon also won a court order from the U.S. District Court for the Southern District of New York in December freezing more than $300 million belonging to PDVSA, as Exxon argued it would have little chance to recoup its investment from PDVSA should it win its arbitration. . . .

2/07/2008

McCain's voting record.

Given all the references in the press the last couple of days to McCain's voting record, I thought that I would look up some numbers. McCain is on the liberal side of Republicans, but there is a big difference between him and the average Democrat.

McCain's ACU ratings (100 most conservative, 0 most liberal):

2006 65 Average for Republicans 81 Average for Democrats 112005 80 Average for Republicans 86 Average for Democrats 122004 722003 802002 842001 682000 811999 77

McCain's Americans for Democratic Action ratings (higher means more liberal with 100 as the highest):

amendment to allow the Secretary of Health and Human Services to negotiate with drug manufacturers for lower drug prices under Medicare. Rejected 49-50.

McCain (R-AZ) amendment to establish the U.S. Army Field Manual on Intelligence Interrogation as the uniform standard for interrogating persons detained by the Department of Defense, and prohibit cruel, inhumane or degrading treatment of any prisoner detained by the U.S. government. Adopted 90-9. October 5, 2005.

Here are the seven liberal votes included in the index that he made that year:

1) Voted to require gun locks sold with guns. 70-272) increasing funds for childcare by $6 billion over five years. 78-203) extending unemployment benefits 59-404) "amendment blocking reclassification of nuclear waste that would allow the Defense Department to leave the waste in place." 48-485) Voted for Ted Kennedy amendment on Iraq. Given his claims on the Iraq war, this is very strange since it was a pretty much party line vote with Kennedy trying to cause trouble for the Republicans. 48-506) Against constitutional amendment defining marriage as between a man and woman. 48-507) "A bill reorganizing 15 U.S. intelligence agencies and creating a national intelligence director with power to freely transfer money among the CIA, National Security Agency and other defense and civilian agencies." 96-2

2/06/2008

The Emptiness of Campaign Finance Reform

The Drudge Report mentions that the Clinton's may be spending their own money now on Hillary's campaign. Note how the WSJ recently reported:

Former President Clinton stands to reap around $20 million -- and will sever a politically sensitive partnership tie to Dubai -- by ending his high-profile business relationship with the investment firm of billionaire friend Ron Burkle. . . .

Obviously Clinton has gotten a lot of money from other sources so there is no need to single out Burkle, but Burkle obviously can't donate $10 or $12 million to Clinton's campaign. Yet, if he pays Clinton for work that isn't very obvious, Clinton can then turn around and spend it on a campaign. Does it really matter that Burkle can't give the money directly to Clinton?

2/05/2008

Typical email that I am getting on the Republican Presidential Candidates and Gun Control

John,First of all thank your hard work defending the 2nd Amendment. I have to vote today and am quite torn as usual. I am not a one issue voter. I have always admired John McCain's sacrifice for our country, but seeing him chumming up with Arnold really bothers me. I have a lot of friends in CA that are furious about The Governor signing yet more anti gun legislation, as as they say so goes CA, so goes the Nation. So I may end up voting for a man I don't respect as much...

Any thoughts?

My response:

Well, with Romney you will likely get an new assault weapons ban. With McCain, you will get a gun show regulation bill that will regulate all private transfers of guns. I would also guess that you could get a bill requiring that people use gun locks. I am not sure what Romney really believes because he has changed his positions on too many issues. Of these different laws, I think that the gun locks rule is the worst because if prevents people from using guns defensively.

Personally, I worry that both Romney and McCain will be weak general election candidates though for different reasons. Romney because he has changed his position on too many issues. McCain will be attacked as too old and will have a tough time getting the conservative base to turn out.

My bottom line is the courts. I think that Romney is probably more likely to appoint conservatives to the courts than McCain. I think that McCain will have a very hard time appointing conservatives to the court if he really wants his campaign finance regulations put in place. I believe that there is a strong correlation between their views on protecting the First Amendment on political speech and the Second Amendment.

League of Conservation Voters endorsed McCain in 2004

I thought that this endorsement by the League of Conservation Voters was enlightening:

LCV has endorsed Republican John McCain for reelection in the U. S. Senate to represent Arizona. Senator McCain has been a leader on global warming, a strong voice of reason against drilling in the Arctic Wildlife Refuge, and has voiced his opposition to the Bush/Cheney Energy Bill. He is the lead sponsor on the bipartisan McCain-Lieberman Climate Stewardship Act of 2003 that would require a reduction in carbon dioxide emissions to 2000 levels by the year 2010. Senator McCain said, "We must take action, and act appropriately. Many have hidden for too long behind what we do not know or the uncertainties around climate change. Their shield is shrinking." The Senator voted against an amendment that would have opened the Arctic Refuge to oil drilling and in a letter addressed to the President said, "I have thought long and hard about this debate and the vote that I will cast. I still hope we can achieve a more balanced national energy strategy, but I am not convinced that a key component of that policy should be to drill in ANWR." Before voting against the Energy Bill, he sent a letter to Congress stating his opposition to the manner in which the bill was developed, he said, "One of the other problems that I have with this bill is the way in which it was developed. This secretive, exclusive process has lead to a 1200 page monstrosity that is chock full of special interest giveaways and exemptions from environmental and other laws that frankly can´ withstand the light of scrutiny." If you would like to support Senator McCain's campaign, please contact Vivien Braslau at vivien_braslau@lcv.org.

Here is an interview where McCain is arguing that he is the strongest green candidate:

Why should voters consider you the strongest green candidate? What sets your platform on energy and the environment apart from the others?

My clear record of environmental advocacy and activism, ranging from my efforts to protect the Grand Canyon to working with [Connecticut Sen.] Joe Lieberman to get a cap-and-trade proposal to reduce greenhouse-gas emissions through the United States Senate.

You've said that global warming would be one of three key issues for your presidency. Why do you think the issue is important?

It's like Tony Blair said: Suppose we're wrong, and there's no such thing as greenhouse-gas emissions, and we adopt green technologies. All we've done is give our kids a better planet. But suppose we're right, and do nothing? Then what kind of a legacy are we handing on to future generations of Americans? I think we ought to frame the debate that way.

And I think most, if not all, of the ways that we can address this issue are through profit-motive, free-enterprise-system-driven green technologies. General Electric dedicated itself to green technologies, and guess what? They're still making a lot of money.

Brief to over turn DC gun ban filed today

2/03/2008

A good textbook discussion on the benefits of globalization

Donald Boudreaux has a new book out, Globalization, that covers everything from why people trade to the "alleged exceptions" to free trade to how trade impacts jobs and wages. The book is well worth using for an undergraduate class or for anyone interested in learning about the benefits of trade. It is priced as a textbook (so it is expensive), but I am glad that I bought a copy and I think that others will be too. I particularly thought that Chapter 4 on "Trade, Jobs, and Wages" as well as Chapter 6 on "The Balance of Trade" were well done. If Chapter 4 alone was read by enough people, the political debate these days would be quite different.

Another Shooting in a Gun Free Zone

Of course, permitted concealed handguns do not exist any place in Illinois given that this is one of two states that completely ban them any place. Yet, the ban doesn't seem to have stopped this attack:

TINLEY PARK, Ill. — A gunman fatally shot five women in a robbery at a store in a suburban Chicago strip mall and fled Saturday, prompting police to sweep through neighboring shops as terrified customers watched. . . .